Best way to become financially ready to take a personal loan
Most of the time in our life when we require funds to borrow for wide-ranging purposes like home renovation, medical emergency, foreign vacation, etc. Personal loans act as a bridge towards achieving these most of the time. However, while planning to avail of a MoneyTap loan, it’s always prudent to jot down a clear road map before submitting the application, as doing so ensure you are financially ready to go ahead.
Let us understand the financial checkpoints clearing which indicates that you are ready to avail a MoneyTap loan:
Include the required loan’s expected EMI in your emergency fund
An adequate emergency fund assists in tackling unforeseen financial emergencies which are capable of disrupting your regular income inflow, such as sudden job loss, severe illness or disability. Given that an adequate emergency fund should ideally amount to at least six times of mandatory monthly expenses, it becomes one of the key pillars of solid financial planning; it’s important to ensure you have it in place during the roadmap planning to avail a MoneyTap loan.
Before submitting your loan application, make sure your new proposed MoneyTap personal loan’s EMIs are factored in, apart from other mandatory monthly expenses to be beared, like loan EMIs, insurance premium, credit card bills, children’s tuition fee, rent etc. By factoring in the new loan’s EMI in your emergency fund, you get assistance in the continuation of the loan repayments whenever adverse life events involving financial exigency strike.
Review your credit profile beforehand
While evaluating your MoneyTap loan application, a credit score is one of the filters factored in to assess your creditworthiness and repayment history to indicate your repayment behaviour. Generally, a good credit score boosts chances of loan approval and may also enable the borrower to fetch a lowest personal loan interest rate on loan under risk-based pricing, along with better service terms.
Keeping this in mind, it becomes extremely important to fetch your credit report at regular intervals, especially if you are planning to avail of a loan. If your credit score is low, take corrective measures to gradually improve it and apply for the loan only when the credit score reaches a high enough mark as per MoneyTap personal loan’s cutoff requirements, if any.
Assess your EMI affordability to boost approval chances
One of the vital parameters factored by lenders to assess your repayment capacity upon receiving your loan application is your income to EMI ratio. This is the proportion of your income currently being used for repayment of mandatory debt obligations such as loan EMIs, credit card bills, etc. Lenders usually tend to prefer lending to those with this ratio within 40%-50% mark (including new MoneyTap loan EMI), as applicants whose ratio turns out to be higher than this tend to involve a higher likelihood of default, as a major proportion of their income is already blocked for mandatory debt repayments. If your income to EMI ratio is higher than 40%-50%, consider steps like prepayment of some of your existing loans to pull down this ratio within the stipulated range, or go for debt consolidation, and then apply for the MoneyTap personal loan.
Compare amongst numerous potential lenders.
Before zeroing in on a MoneyTap loan or any other lender to submit a loan application, it’s vital to compare amongst prospective ones on parameters like loan’s interest rate, eligible loan amount, repayment tenure, processing fee etc. Then finalize the most suitable lender on the basis of factoring in an array of parameters like credit score, monthly income, job and employer profile, etc.
What determines your MoneyTap Personal Loan Eligibility
Amongst the eligibility criterion factored in by lenders like banks, NBFCs and fintech, what holds prime importance is the repayment capacity of the borrower. So, all lenders tend to check the repayment capacity of borrow, post which it is determined whether the applicant is eligible and capable enough to timely repay the expected MoneyTap loan EMIs, as per the chosen loan amount, tenure and applicable interest rate. To get a fair idea about eligibility, borrowers can also check the MoneyTap personal loan eligibility by using the eligibility calculator available for free online.
Key ratio calculations factored in to determine MoneyTap Loan eligibility.
- MoneyTap Personal Loan EMI to Income Ratio- This ratio determines the borrower’s repayment capacity towards the loan. It ensures that the loan remains within the repayment capacity of the borrower, which is considered if the EMI is up to 33-40% of the borrower’s monthly income. If not, the loan amount can be reduced, or tenure can be extended to lower the EMI amount.
- FOIR- Fixed obligation to income ratio is another parameter to decide repayment capacity of MoneyTap Loan. It factors in not only the new loan’s expected EMI but existing debt repayment obligations also, like EMIs, insurance premiums, credit card bills etc. It basically displays whether the borrower’s income is enough to ascertain no default in loan EMIs in future.
Most Loved Features of MoneyTap Personal Loan
- Flexibility in borrowing in the form of varying loan amounts- MoneyTap allows you to choose any loan amount from the given range, making it a flexible decision dependent on the borrower’s repayment capacity and requirement.
Interest applicable only on utilized amount-The interest rate is applied only on the utilized amount of loan borrowed as a credit line. The unused part of the credit line does not attract any interest rate.
- No collateral or security required- Being completely unsecured in nature, MoneyTap loans do not involve the requirement for any kind of collateral or security to avail the loan against it. Hence, borrowers can remain stress-free regarding putting forth anything for pledging to avail of the loan. No margin or security/collateral is required.
- Completely safe and hassle-free access to credit-When a borrower takes MoneyTap Loan, it is assured of dealing only with regulated financial institutions and their very own NBFC too.
- No expiry on offered credit line-MoneyTap personal loan’s offered credit line keeps on getting recharged as and when you repay it, irrespective of the number of times.